Stay disciplined and avoid rushing into deals without thorough due diligence.Resources for InvestorsIf you’re new to investing in distressed properties or looking to expand your portfolio, consider leveraging resources like:Local Realtors: Realtors specializing in distressed properties can assist in locating off-market deals and navigating complex transactions.Community Forums: Attend a local investor meetup or join online forums for the Phoenix market.Educational Tools: Search out webinars, workshops, or courses on investing in distressed properties.Final ThoughtsThe distressed property market in Phoenix is creating some excellent potential for the right investors willing to go the extra mile necessary to take on strategic risks associated with this category of real estate.

I do like the tax benefits and leverage.

A second problem related to “over leverage” is a lack of contingency funds.  

With this in mind, if you intend to leverage short-term debt (hard money), it's even more vital that your underwriting is thorough and that you have the correct systems in place to tackle potential issues.

Banks who offer construction financing tend to be 75-80% LTC and alternative/hard money lenders will sometimes offer higher LTC leverage than that.

That is tight leverage for an investment 2nd position loan.A private investor might be willing to do it, it's not going to be cheap at all & will be short-term money & will not be a line of credit to take out at your liking.What is your rate on the 1st?

Leveraging equity does involve some risk, so it's important to have a sound strategy to avoid overextending yourself.

Was able to gain some leverage prior to negotiating which resulting in a great outcome What was the outcome?

I want to minimize my leverage as much as I can for my first one, just to give me the best chance of success.Got it, @Geoff Engel!

Leveraging our market connections, we identified the property’s potential and negotiated favorable terms directly with the seller, securing it at a highly competitive price.